Canada’s federal funding agency Canada Growth Fund (CGF) has proposed funding a multibillion-dollar investment in carbon capture by the Pathways Alliance, which represents Canada’s largest oil sands producers, The Globe and Mail reports.
The CGF proposal is expected to kick-start new negotiations, but a final deal is likely months away as the two sides remain far apart on key terms, according to Sunday’s report, which cited sources familiar with the matter.
Carbon capture is a process by which carbon dioxide generated by industrial activity is stored underground. The report did not mention any financial details about the investment.
Pathways Alliance and Canada Growth Fund did not immediately respond to Reuters requests for comment.
Pathways Alliance has been proposing a C$16 billion ($11.51 billion) investment in a carbon capture and storage (CCS) project to reduce carbon emissions from the tar sands. The plan, however, has faced criticism from environmentalists for the slow pace of progress and the search for more government financial support.
The Pathways Alliance is made up of Canadian Natural Resources, Cenovus, ConocoPhillips Canada, Imperial, MEG Energy and Suncor Energy, which represent about 95% of Canada’s oil sands production, according to its website.
The CGF, for its part, is a $15 billion public investment vehicle that helps attract private capital to build Canada’s clean economy using investment instruments that absorb certain risks, in order to encourage private investment in projects , technologies, companies and supply chains with low carbon emissions, according to its website.
Earlier this year, Canadian oil producer Strathcona Resources partnered with the CGF to build carbon capture and sequestration infrastructure in the provinces of Saskatchewan and Alberta.
($1 = 1.3895 Canadian dollars)
